Enhancing Warehouse Efficiency with RF-Driven Physical Inventory in SAP EWM

[GowthamParasa]

In this blog, we will explore how RF technology revolutionizes Physical Inventory management, enhancing accuracy, reducing manual errors, and driving operational excellence. 

                                                           Physical Inventory:

• Physical Inventory is a Process to count and compare the Actual Shop floor Quantity with Book entry Quantity.
• It plays a crucial role in the audit process, ensuring accuracy, compliance, and financial transparency.
• There are two ways in which PI can be Carried out – 1) Product Specific(PI done at Product Level) 2) Storage-bin Specific(PI done at Bin-level).
• There are 3 types of PI – 1) Periodic 2) Annual 3) Cycle Counting
• Movement types in PI – 711 (For Short Inventory) , 712 (For Excess Inventory).

                                                       Flow Chart   

            

                                                 Configuration Required:

• 𝘘𝘶𝘦𝘶𝘦 𝘔𝘢𝘯𝘢𝘨𝘦𝘮𝘦𝘯𝘵
• 𝘙𝘦𝘴𝘰𝘶𝘳𝘤𝘦 𝘔𝘢𝘯𝘢𝘨𝘦𝘮𝘦𝘯𝘵
• 𝘗𝘩𝘺𝘴𝘪𝘤𝘢𝘭 𝘐𝘯𝘷𝘦𝘯𝘵𝘰𝘳𝘺

                                         Configuration for Queue Management:

Define Queue Types: Simg -> SCM EWM -> EWM -> Cross-Process Settings -> Resource Management -> Define Queue Type

                                   

Define Queue: Simg -> SCM EWM -> EWM -> Cross-Process Settings -> Resource Management -> Define Queue       

         Define Queue:                                                     

                    

        Define Queue Access for Physical Inventory:       

                 

       Define Queue Access Sequence:

      

                                      Configuration of Resource Management:

Define  Resource Type: Simg -> SCM EWM -> EWM -> Cross-Process Settings -> Resource Management -> Define Resource Type

Define Resource Group: Easy Access -> SCM EWM -> EWM -> Master Data -> Resource Management -> Maintain Resource Group

                                             

Maintain Queue Sequence for Resource Group: Easy Access -> SCM EWM -> EWM -> Master Data -> Resource Management -> Maintain Queue Sequence for Resource Group:

                            

Maintain Resource: Easy Access -> SCM EWM -> EWM -> Master Data -> Resource Management -> Maintain Resource:

                             

Maintain User: Easy Access -> SCM EWM -> EWM -> Master Data -> Resource Management -> Maintain User:

                                                      

                                                   Configuration for Physical Inventory:

Create Physical Inventory Document: Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Physical Inventory Area Specific Settings -> Define Physical Inventory Area.   

           

          

Now , in the same way create permitted Document types for PIA ETEW_PIA_PG40.      

Assign Physical Inventory Area to Activity Area: Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Warehouse Number Specific Settings -> Assign Physical Inventory Area to Activity Area.     

        

Define Number Ranges for Physical Inventory Process: Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Warehouse Number Specific Settings -> Define Number Ranges for Physical Inventory Process.                                  

Specify Physical-Inventory-Specific Settings in the Warehouse : Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Warehouse Number Specific Settings -> Specify Physical-Inventory-Specific Settings in the Warehouse.                           

Define Tolerance Group: Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Warehouse Number Specific Settings -> Define Tolerance Group

        Define Tolerance Group for Difference analyzer:

        

        Define Tolerance Group for Posting Differences:       

                                 

       Define Tolerance Group for Recounting:                       

       

Reason and Priorities: Simg -> SCM EWM -> EWM -> Internal Warehouse Processes -> Physical Inventory -> Warehouse Number Specific Settings -> Reason and Priorities

   Define Priorities:

    

 Define Reason for Physical Inventory:

Define Reason for Differences:

Define Standard Reason for each Physical Inventory Procedure:

Assign User to Tolerance Group for Difference Analyzer (/n/scwm/PI_User_Diff):

             

Assign User to Tolerance Group for Recounting/Clearing (/n/scwm/PI_User)      

                 

                                                   Testing :

  Scenario Assumption : Ad-Hoc Physical Inventory for Product 5869 in SAP EWM

Background: A warehouse operator identifies a discrepancy in stock during a routine check and initiates an Ad-Hoc Physical Inventory (HS-Adhoc PI - Product Specific) for Product 5869 stored in Bin PG40-01-01-03.

System vs. Physical Count:

• System Stock (EWM): 80 units
• Physically Counted Stock: 76 units
• Variance: -4 units

In this test case, we execute two scenarios using RF: Excess Physical Inventory (PI) Adjustment with Movement Type 711 and Shortfall Physical Inventory (PI) Adjustment with Movement Type 712.

Before going to Test physical Inventory Via RF , go to Monitor and check the Stock of the Product in one of the bin:

Now Check the Stock in S4 Side:

Test Case Scenario – 1:

Now go to T-code : /n/scwm/RFUI:

Since Resource is Doing Physical Inventory , Let go with Resource Name HUM1 (Human)

Enter Bin and Click on Enter. Storage type , Reason and Priority will be Auto-populated.

Now Enter the Product and Click on F1:

Now from RF , PI Document have been Created.

Now go to Adhoc Inventory Counting , Give the Bin and Product Details , Click on enter and then click on F3.

Here ACTI means Active and now we need to Count it. HS means Adhoc PI (Product Specific).

Now come back from the Screen and go to System-Guided à System-Guided by Queue and enter Queue. Here Queue is Internal and Click on Enter.

Scan the Bin and Click on Enter:

Now Scan the Product and Click on Enter.

Now Enter the Product Count which was Done Physically and Save it. Here as per the Scenario the total count is 76.

Now go to Adhoc Inventory Counting , Give the Bin and Product Details , Click on enter and then click on F3.

Here Status have updated to COUN which means count has happened.

Now we will Check the Stock Status in the Monitor and see whether it is updated or not:

If we see , Stock has not updated , even though Count has been Done. This is Because , we did not perform the Post Action after Count has done.

Only Supervisor or Manager have the Authority to post. Resource who has done Inventory from RF will not given Access to Post the Count , it has to be approved either by Manager or Supervisor as per the business.

So for testing purpose , we go to monitor and check the Inventory Document Status.

Now Post the Physical Inventory Document:

Now go to Adhoc Inventory Counting , Give the Bin and Product Details , Click on enter and then click on F3

Here Status have updated to POST which means Post has happened in EWM Side.

Now we will Check the Product Quantity in Available Stock.

Now the Product Quantity is updated to 76 , which means Stock has been posted from EWM Side.

Now Lets Check in S4 Side , in MMBE t-code :

In the S4 Side , it is not Posted. This is Because the Difference did not get posted. This should be done through Difference Analyzer.

So this should be done in the T-code /n/scwm/Diff_Analyzer.

Now Post it:

The warehouse which will be created , will be confirmed Automatically.

Now Check the Stock in S4 Side in MMBE:

Now Check in T-code MB51:

Here Movement type is changed to 711 it represents Inventory has been reduced in the system to match the actual count. 

Now Check the Stock Comparison in T-code : /n/scwm/ERP_Stockcheck.

                                                       Test Case Scenario 2:

Background Assumption:

• After an initial Ad-Hoc Physical Inventory (HS-Adhoc PI - Product Specific) for Product 5869 in Bin PG40-01-01-03, the count was updated to 76 units.
• However, the supervisor has concerns regarding the accuracy of the count and requests another Ad-Hoc PI 10 days later , to verify the stock.
• After verification, the actual stock count remains at 78 units, whereas the system originally displayed 76 units. Due to this discrepancy history, the manager requests an inventory adjustment process for system log updates, ensuring proper audit and reporting compliance.

So Lets check the Stock in Monitor:

Now go to T-code : /n/scwm/RFUI.

Internal Process -> Inventory Counting -> Adhoc Inventory Creation.

Give the Storage bin and Click on enter , Storage Type , Reason and Priority will be Auto-populated and after that enter Product and click on F1

Internal Process -> Inventory Counting -> Adhoc Inventory Counting.

Here it Shows ACTI which means Document 5016 which got created is in Active Status.

Now come back from the Screen and go to System-Guided à System-Guided by Queue and enter Queue. Here Queue is Internal and click on Enter and Scan bin.

Now Enter the Product Count which was Done Physically and Save it. Here as per the Scenario the total count is 78.

Here Counting is Done , but in the Monitor it did not get updated.

Now got to Monitor and post the PI Document

Now go back to RF and Check the Status of the PI

Here the Status got updated as POST , which means Posting has been completed in EWM Side.

Now go to Available Stock and see the Available Stock and it got updated to 78.

Now Check the Status in S4 Side , it is showing as 76.

Now post the Difference Quantity from Difference Analyzer:

Warehouse Task which got created will be Automatically Confirmed.

Now Check S4 Side and it updated to 78.

Now Check the Movement type in MB51:

Here Movement type changed to 712 and it represents that Inventory has been increased in the system to match the actual count which was done Physically.

Now Compare the Stock Check in /n/scwm/ERP_Stockcheck:

                 

                                        𝗢𝘃𝗲𝗿𝘃𝗶𝗲𝘄 𝗮𝗯𝗼𝘂𝘁 𝘁𝗵𝗲 𝘁𝘆𝗽𝗲𝘀 𝗼𝗳 𝗣𝗵𝘆𝘀𝗶𝗰𝗮𝗹 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆:

Cycle Counting:

• Cycle Counting is a strategic Physical Inventory method that is always product-specific, ensuring precise stock management. Inventory is systematically counted at regular intervals throughout the fiscal year, which can be monthly, quarterly, or annually, based on business requirements.
• The frequency of counting is determined by the Cycle Counting Indicator set in the Product Master, which triggers the automated generation of Physical Inventory (PI) documents.
• Interval – The predefined timeframe for inventory counting.
  Buffer Time – An extended grace period after the interval expires before the count is due.

SAP has provided us Standard Cycle Indicator

Below are the T-codes which we use for Cycle Counting Process:

• /n/scwm/PI_CC_create
• /n/scwm/PI_process
• /n/scwm/Diff_Analyzer

Periodic Counting:

Periodic Counting is all about counting of whole inventory at regular intervals like Monthly or Quarterly or Yearly.

Annual Counting:

Annual Counting is all about counting of whole Inventory , only once in a year .

Conclusion:

The blog effectively highlights the importance of RF-driven Physical Inventory in SAP EWM, providing a step-by-step guide on configuration, execution, and reconciliation. The well-defined test cases reinforce how real-world inventory discrepancies can be efficiently handled using SAP EWM RF transactions. This approach significantly enhances inventory control, compliance, and warehouse efficiency.